|
Korean Job Discussion Forums
"The Internet's Meeting Place for ESL/EFL Teachers from Around the World!"
|
| View previous topic :: View next topic |
| Author |
Message |
Kuros
Joined: 27 Apr 2004
|
 Posted: Fri Mar 13, 2009 8:38 am Post subject: Wen Jiabao Worried on Safety of U.S. Treasuries |
 |
|
Wen Jiabao worried about Chinese investments in U.S. Treasury Bonds
| Bloomberg wrote: |
�We have lent a huge amount of money to the United States,� Wen said at a press briefing in Beijing today after the annual meeting of the legislature. �I request the U.S. to maintain its good credit, to honor its promises and to guarantee the safety of China�s assets.�
�Of course we are concerned about the safety of our assets,� said Wen. �To be honest, I am a little bit worried.�
U.S. President Barack Obama is relying on China to sustain buying of Treasuries as his administration sells record amounts of debt to fund a $787 billion economic-stimulus package. Chinese investors have lost money on the securities so far this year, after increasing their holdings 46 percent to $696 billion in 2008, according to Treasury Department data.
�China is worried that the U.S. may solve its problems by printing money, which will stoke inflation,� said Zhao Qingming, a Beijing-based analyst at China Construction Bank Corp., the country�s second-biggest lender. �If the U.S. can make sure this won�t happen, then China will continue to invest. |
Two comments:
1) China is signaling displeasure with U.S. fiat
2) This shows that, for now, the U.S. holds more of the cards than China; the Chinese backed debt is more of a problem for the PRC than it is the USA |
|
| Back to top |
|
 |
Gopher
Joined: 04 Jun 2005
|
| Posted: Fri Mar 13, 2009 10:01 am Post subject: |
|
|
Exactly. And we need to link this to the naval thread. Probably no coincidence that these are occurring at the same time. Beijing seems to be testing the waters, so to speak, on multiple fronts, to see what it might get now that it has not yet got.
Probably testing B. Obama as well, to see how he carries himself and the govt if and when he responds... |
|
| Back to top |
|
|
mises
Joined: 05 Nov 2007
Location: retired
|
| Posted: Fri Mar 13, 2009 1:38 pm Post subject: |
|
|
I like IPE Zone's take on this:
http://ipezone.blogspot.com/2009/03/wens-pointless-bellyaching-on-prcs.html
| Quote: |
A few thoughts:
1. China keeps invoking non-intervention in other countries' affairs, especially when quizzed about Tibet, Burma, or Sudan. For this Nehruvian principle to hold, I suggest that it leave American monetary and fiscal policy to the, er, Americans.
2. When it comes to these sorts of economic relations, exit says more than voice (complaining) or loyalty in the vernacular of Albert Hirschman. If China were really "concerned" about the eventual haircut it will receive (via surefire dollar devaluation as a tsunami of treasuries is issued this year) on top of that which it has already lost (think Blackstone, Morgan Stanley, etc.), then it ought to consider some "portfolio diversification."
3. The point I am sick and tired of hammering in is this: China providing what Brad Setser estimates as $500B in dollar financing year in and year out has afforded the US to go on serial misadventures--Iraq and Afghanistan, the housing boom and bust, securitization, and now bailing out any and all comers. It's the ultimate "moral hazard": If China will buy whatever dreck the US will sell to finance the excesses China doesn' particularly like such as virtually all of the above, then it should just stop buying Treasuries. China is responsible for allowing "low savings and high consumption" to proliferate. Yes, it will lose money when the dollar slides as the PRC stops financing American's continuing jihad on fiscal sanity, but it'd be only saving up for a bigger loss further down the line.
This madness must stop. In the meantime, I am 0% sympathetic to China for indulging America's reckless behavior. You get what you deserve. With restless, jobless college grads hitting the streets, maybe the PRC should explain to them why the public purse has been used for such a monumental folly--one the likes our world has never seen before and hopefully will never see again |
|
|
| Back to top |
|
|
Hater Depot
Joined: 29 Mar 2005
|
| Posted: Fri Mar 13, 2009 6:48 pm Post subject: |
|
|
| A US default would have catastrophic consequences around the globe. It's not the kind of thing anyone has to remind the President to be worried about. |
|
| Back to top |
|
|
|
|
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
|
|
FAQ
Search
Memberlist
Usergroups
Register
Profile
Log in to check your private messages
Log in
